A class-action lawsuit has been filed against Solana Labs, with claims that it is promoting an unregistered security.
- The lawsuit filed by Solana investor Mark Young, targets Solana Labs, Solana Foundation, Anatoly Yakovenko, Multicoin Capital Management, Kyle Samani, and FalconX for selling an unregistered security, being Solana.
- Young debates that Solana cannot be claimed as a decentralized token, as nearly half the supply is owned by those close to the development of the project, “As of May 2021, insiders held 48% of the SOL supply. The network is thus highly centralized,” the lawsuit claims.
- Young also states that there are discrepancies in the total circulating supply of the token after a large sum of tokens were oversupplied to a market maker, where less than 30% of those were taken out of circulation.
- The lawsuit comes after frequent network outages within the Solana ecosystem in the past year. Where it claims that there have been “major losses for network users,” in relation to the outages.
- There are also claims that the ICO and proceeds made from it was able to fund heavy advertising in the United States, which pumped the token to $258. At the time of press, Solana is trading at $36. This is over an 85% fall from its all-time high of $258 in November of 2021.
